TheChek News Flow

Dubai’s property market is thriving —and its neighbours are taking notes

Price rises of 147 per cent in five years, soaring skylines and a rush of new residents are an inspiration to some, a cautionary tale to others

In 2029, Dubai’s first skyscraper, the World Trade Centre, will turn 50 years old. When it was built, the 39-storey tower was an outlier, an ambitious spindle that stuck out in a low-rise landscape. Now it’s almost hard to see, dwarfed by soaring new additions. The first rash of those skyscrapers went up around the turn of the century, continuing until the Great Recession of 2008 upended the emirates’ fortunes. 

Almost two decades later, Dubai is thriving. Residential sales in the third quarter of 2024 reached Dh120bn ($32.7bn), according to CBRE, and Knight Frank’s 2024 Destination Dubai Report projected the year’s spending by top-end homebuyers (those with a personal net worth in excess of $20mn) would hit $4.4bn, a rise of 76 per cent year on year. Its most recent Wealth Report, published this month, showed property prices in Dubai rose 147 per cent over the past five years. Savills has increased its Dubai team from 3 to 100. Dubai’s neighbouring cities are watching closely — in their different ways looking to emulate or distance themselves from Dubai in a bid to attract new residents.  

One keystone of Dubai’s success has been in the more diverse profile of buyers, says Michael Lahyani, founder of PropertyFinder — the local answer to Rightmove or Zillow — largely thanks to the now six-year-old Golden Visa programme. It was introduced specifically to encourage foreigners to treat Dubai as more than just a tax-free pit-stop for a couple of years — and it seems to be working. After the Gulf Cooperation Council buyers came a flurry of Russians and Indians: “It’s for entertainment purposes, a place to go for a weekend,” says Lahyani.

In 2025, though, an increasing number of buyers are coming from Europe and North America. A recent study by migration consultancy Arton Capital, for example, flagged that 37 per cent of Germany’s wealthiest are now emigration-prone, with the UAE a prime destination. There is also a rise in American arrivals. Leigh Williamson is a Canadian who moved to Dubai 18 years ago, and has been a Sotheby’s agent for 11 of them; she says her client base has 20 per cent more Americans than a decade ago. Typical was the billionaire to whom she sold an apartment in one of the highest profile, internationally branded developments; they snapped it up as a convenient additional home within easy reach of both Europe and Asia. “We’re also seeing Iranian, Indian and Middle Eastern Americans moving back to the region to be closer to family,” she says Williamson. 

“Buyers who bought to flip used to be the majority, but that’s changing,” says Lahyani. A rise in rental costs has also nudged more expats towards buying, he adds: “You can get anywhere between six and eight per cent yield unleveraged. So a lot of the buyers are buying to live in.” 

Longer-term planning has reshaped construction, too, pivoting towards families. Shahab Lutfi is chief executive of H&H Development, which has worked on brands including Jumeirah and Four Seasons and its own branded residence, Eden House. “The demand for houses is very high — with what we’ve launched so far, we’re picking up lots of expats who live in Dubai but couldn’t find the right product,” he says, of the departure from identikit high-rises. Lutfi’s Eden Hills project launched in November last year and he says 130 houses have sold so far, starting from $5mn for a 7,446 sq ft property. Even when high rise developments are built now, there’s a shift towards larger homes. Lutfi’s initial floor plans for the first Eden House tower maxed out at three-bedroom apartments, but he now tells architects to include four- and five-bedroom options.  

Behind the scenes, the government now regulates construction more rigorously, in order to offset the risk of repeating the crash that happened in the wake of the global financial crisis. “In 2007, Dubai was the Wild West, and heavily in debt,” says Sotheby’s Williamson. Andrew Cummings, head of residential for Savills Middle East, also notes that buyers have greater safeguards: “When you buy off plan now, all the money goes into escrow, and the land department is very regulated.”

Neighbouring cities are quietly taking note. Capital of the UAE Abu Dhabi has adopted a different approach to development — in part, thanks to the security of its vast energy stockpile (it has 96 per cent of the UAE’s oil reserves, and just surpassed Oslo to become the world’s richest city in terms of assets managed by sovereign wealth funds, with $1.7tn). The focus here is less on smaller apartments with maximum mod cons for mid-level execs, and more on larger, family-friendly footprints that will offer a true sense of both home and hideaway. It’s also reflected in the pace of day-to-day life. “It’s a lot more measured and not in a rush. There isn’t the hustle and bustle of Dubai,” says Michael Lahyani. “Families like it, and it has some of the nicest beaches, and hundreds of natural islands.”

Cummings says comparable properties are around 20 per cent cheaper there than in Dubai — up to around $800 per sq ft for the W Abu Dhabi on Yas Island, compared with $1,300 at the W in Dubai Harbour. There are occasionally even better bargains, he confides. “A 20,000 sq ft villa? I sold a client one in Dubai for Dh90mn [$24.5mn] and called them and said ‘Do you want to buy the same thing, but half price, in Abu Dhabi?’ ” Some of Williamson’s clients “are thinking they’d rather be up there and do the 45-minute drive down to the bling-bling fast-paced city for work, then go back to something a little more quiet,” she says.

Cash-rich Abu Dhabi has also staked a claim on cultural capital, with partner outposts of both Louvre and Guggenheim museums, intending for those to shorthand its perhaps more highbrow approach to high-end living. There’s more everyday fun to be had, too. “It’s turning itself into a lifestyle destination — the sheer number of times I’ve been in Abu Dhabi for events recently: we went to see Kevin Hart, Ed Sheeran and Michael McIntyre there,” Cummings says.

Elsewhere in the region, it’s a different story. Qatar, which has so faithfully followed Dubai’s template in its gleaming built environment, hasn’t seen the same surge in real estate sales. In part, that’s because it is less expat-friendly than Dubai — attitudes towards alcohol remain conservative, for instance — but it’s also thanks to the lack of tourism. “Tourism to Dubai breeds familiarity,” says Cummings; moving to the Gulf often starts with a vacation. “And how many friends have gone on holiday to Doha?” (There were 18.7mn visitor overnights in Dubai last year, versus just 5.08mn in Qatar, according to data from the respective governments.)

Ras Al Khaimah, or RAK, is the other intriguing emirate: it’s where gambling will soon be permitted for the first time, with a $3.8bn Wynn-branded complex opening on Al Marjan Island in 2027 and planned residences from Nobu, Four Seasons and Ritz-Carlton. “It’s a relatively quiet emirate, known for its ceramics and nature, but it’s where Dubai was in 2005,” says PropertyFinder’s Lahyani. There are more than 60 luxury developments in the pipeline there, with prices starting from Dh700,000 (around $190,000) and many sales open; the first, Playa del Sol, is scheduled for delivery in the second quarter of next year, but the majority are slated for 2027-28. “There are also a lot of first time developers,” Lahyani adds, “and prices are lower than Dubai considering that it’s a smaller, more nascent market”.

Perhaps the most interesting potential in the region is a little farther away, on the island nation of Bahrain. Historically, this former British protectorate was the most outward-looking country — it was a trading post on the Silk Road, driven in part by its world-class pearls, and was wealthy as a result. Then the petrodollar revolution elsewhere in the region disrupted its dominance. But now Bahrain is racing to catch up with Dubai and Co, as the skyline fills with cranes to build luxury branded residences from the likes of Kempinski and Waldorf Astoria. “They’re very well priced, at sub $1,000 per square foot,” says developer Shahab Lutfi, “and Bahrain is a beautiful country”.

Bahrain’s authorities are taking a different approach from those in Qatar, and including urban regeneration in their master plan. For example, they didn’t demolish the historic old town, Muharraq, as the Qataris chose to do in Doha to make way for a new Design District. Rather, they established a moratorium on demolition before handing it over to a cultural task force to renovate and adapt it. Work started in the early 2000s and was only completed late last year, and includes the 17-building Pearling Path, which tells the story of that centuries-old industry via a series of old warehouses, offices and homes.

Architect Noura al Sayeh has overseen the programme for the government since its inception. “It’s the largest historic city remaining in the Gulf, and we want to add new layers of value,” she says, noting that the transformation of the area is bringing renewed interest in residency there. “Housing is at the heart of all cities, and there’s nothing at this scale in the Gulf Cooperation Council. We hope the development will continue in this organic way.”

Later this year, you’ll be able to live like a local there for the first time — at least temporarily — when the Murad House, one of the anchors of the Pearling Path, will open as a seven-room, Bahraini-operated boutique hotel.

The ‘freedom railway’: China’s new plan to take on the US in Africa

Tazara project showcases Beijing’s leaner approach to overseas development just as western aid appears to retreat

Mukololo Chanda still recalls the glory days of Africa’s “freedom railway”. Almost four decades ago, fresh from high school in Zambia, she began working as a switchboard operator on the railway built by Mao Zedong’s China that she believed would steer her newly independent country to prosperity.

“It was the only reliable way to travel to many places — everyone was using it,” said Chanda, a bubbly 55-year-old who is now the station master in Kapiri Mposhi, from where the Tazara railway links copper-rich, landlocked Zambia to Tanzania on Africa’s east coast.

But decades of underfunding and mismanagement have today left its decaying wagons and tracks operating at a fraction of capacity. “I was working alongside Chinese [colleagues], everything was running smoothly and we were always paid on time,” Chanda recalled. “I’d like the Chinese to come back.”

She is not the only one. Zambia — long a poster child for Beijing’s reach in Africa — and Tanzania are negotiating with a consortium led by the state-owned China Civil Engineering Construction Corporation for a $1bn concession to rehabilitate and run the iconic railway, reviving the strategic export route to Beijing.

The railway is an exemplar of a revamped, leaner approach to Chinese overseas development that comes just as US President Donald Trump’s gutting of USAID and the UK’s slashing of its aid budget throws western approaches to foreign assistance into question.

China has long taken a different path from western nations, focusing less on humanitarian aid and more on financing grand infrastructure projects that many African leaders say are needed to lift their countries out of poverty.

Tazara showcases an attempt to use more equity investment by Chinese state companies after Beijing’s Belt and Road Initiative was marred by defaults in borrower countries, including Zambia.

Fredrick Mutesa, the secretary-general of the Zambia-China Friendship Association, said that “there’s a feeling that there is no alternative to [the western] model of development, which is more aid than partnership”. Referring to China, he said: “To be able to see a country that has used a different path to development, it’s quite inspiring.”

Whether it succeeds could have far-reaching implications for the deepening competition for influence in a continent that is home to rich deposits of copper and other critical minerals vital to the global energy transition.

A rival US-backed project is under way to upgrade the colonial-era Lobito Corridor and ferry Zambia’s resources westward through Angola instead.

Agreed under former president Joe Biden through the US International Development Finance Corporation, Washington is lending $553mn to the railway in a model that brought in private investors such as Trafigura and Mota-Engil. The DFC, the US’s response to China’s state policy banks, was itself set up under Trump during his first term.

Although Trump’s gutting of US foreign assistance now spells uncertainty for Lobito too, experts say these sorts of commercial, strategic projects may also characterise Washington’s future engagement on the continent.

Trump’s presidency “signal[s] a complete change in the way in which the US perceives its interests in Africa”, said Peter Doyle, a former senior IMF official now with the National Institute of Economic and Social Research.

But “anyone who thinks that the US is going to disengage in terms of pursuing its own interests in Africa and give that to China just really hasn’t spent any time in Washington”, he said.

Started in 1970, the Tazara railway was designed to help copper-rich Zambia access overseas markets after white-controlled neighbouring Rhodesia, today Zimbabwe, shut its borders in opposition to the country gaining independence from Britain.

Under Mao, Beijing forked out Rmb1bn in interest-free loans to build the Tazara, with thousands of Chinese labourers working alongside locals. At its peak, it ferried more than 1mn tonnes of copper, consumer goods and passengers annually.

“The Tazara to this day is still the biggest Chinese aid project implemented in Africa,” said Tim Zajontz, a lecturer at the University of Freiburg. “It continues to be a symbol of the Chinese-African all-weather friendship, as many officials on both sides often refer to it.”

China’s foreign assistance grew in ambition with BRI, which moved to interest-bearing loans, and has disbursed $1tn since 2013.

But Chinese lending to the continent peaked in 2016, with Beijing pivoting away from large sovereign-backed infrastructure projects to taking equity stakes in projects it then operates. Among recent examples are the state-owned China Harbor Engineering Company taking a minor share in Nigeria’s Lekki Port, and the China Road and Bridge Corporation’s three-decade concession of Kenya’s Nairobi Expressway.

“Small and beautiful” has become an official BRI phrase, with projects like the Tazara now typically financed with smaller public-private partnership loans, rather than through policy banks, and then run as concessions.

“China is ready to . . . implement 1,000 ‘small and beautiful’ livelihood projects,” President Xi Jinping said at the Forum on China-Africa Cooperation in Beijing in September, when he signed the memorandum of understanding with Zambia and Tanzania to upgrade the Tazara. Officials in Zambia and Washington told the Financial Times the deal could close as soon as this month. China’s foreign and commerce ministries did not comment.

Beijing’s influence is on display in Zambia’s Copperbelt province, the country’s mining heartland.

Chinese contractors are widening the highway, having already built local hydropower dams and a football stadium. Wedged between billboards of local Pentecostal churches and fast food outlets, signs in Chinese advertise supermarkets, car repair garages, hotels and heavy machinery shops.

At the Lying Dragon supermarket, where shelves were stocked entirely with Chinese imported goods, the Chinese store manager said business was booming.

While experts do not expect China to fill the void in humanitarian funding left by the US and others, it could expand its soft power in other ways, according to Cobus van Staden, managing editor at the China-Africa Project.

China may promote more projects like “model farms” in which Chinese and African universities collaborate on developing climate-resilient seeds. These are “not fully commercial, but are also not conventionally aid in the way that we understand it”, where aid is a type of charity, van Staden said.

Conversely, some experts suggest that US development assistance may start to look more like that of China.

Trump set up DFC during his first term to invest in emerging markets, competing against China’s construction sprees in the global South.

The DFC remains engaged in the Lobito project, according to people familiar with the financing, and is due to disburse part of its loan this month.

But even it is facing bigger questions from the new administration about its form and purpose, including whether it should focus on larger economies and take a harder line on countries that continue working with China.

Ben Black, Trump’s nominee to run the agency and son of private equity grandee Leon Black, wrote in a blog in January that the DFC should stop “pandering to the interest group-driven issue of the moment” and invest in Greenland, a territory Trump wants to annex from Denmark.

Questioning with a co-author, the venture capitalist Joe Lonsdale, why the US sent aid to Uganda while the east African nation attracted Chinese investment, Black asked: “Why are American taxpayers funding the groundwork for Chinese economic dominance?”

Zambia’s mines minister Paul Kabuswe was phlegmatic and said the country — which is aiming to hit 1mn metric tonnes of output annually and overtake the Democratic Republic of Congo as the continent’s top copper producer — did not feel the need to choose sides.

China is injecting up to $5bn into a new copper and cobalt fund that will help boost production, while the ministry is also shoring up investment in the “new Copperbelt” dominated by mostly western operators.

“What is happening in the geopolitical sphere will bring its own shocks, but that’s not something that’s going to affect what we’re [doing],” he said. “We will still stay the course.”

Life at the mines can be tough, however. Branham Chitalu, a worker at a Chinese-owned copper mine in the Copperbelt capital Kitwe, said Chinese mines in particular were unpopular. “Everybody is trying to leave,” he said. “The pay is peanuts compared to the other mines.”

However many Zambians care less about who is providing the money for projects than getting things done.

On a recent weekday, grandfather Wilson Mubanga sat in the Tazara’s faded Kapiri Mposhi station as his train, due to have set off an hour ago, waited to be fuelled. From past experience he expected the journey to Luchewe to see his family to take double its scheduled 12 hours.

“It’s very irritating,” he said. “Anyone who can fix this is welcome.”

Measures designed to protect the struggling US steel industry could also help a cohort of global producers

A small cohort of global steel producers has emerged as unlikely winners from Donald Trump’s sweeping import tariffs, as the US president expands his trade war in an attempt to protect US manufacturing industries.

US steel prices have soared since Trump floated the prospect of a 25 per cent tax on imports of steel — a key component for the auto, construction and packaging industries — from all trading partners.

The tariffs came into force on Wednesday, although Trump retreated from a briefly touted proposals for an additional 25 per cent tariff on steel and aluminium imports from Canada.

The higher tariffs are designed to be a boon for struggling US steelmakers, which have been hit by low demand and high inflation. “The one thing we do know is that the winners in the short-term are the US producers,” said James Campbell, head of finished steel analysis at consultancy CRU.

But a crop of European and Asian manufacturers with large footprints in America also stand to benefit from the levies. Overseas companies with US manufacturing facilities that could benefit include Australia’s BlueScope and Japan’s Yamato Kogyo.

Shares in BlueScope, which generates almost half of its profit in the US and owns the North Star steel mill in Ohio, are up more than 20 per cent since the start of 2025.

The share price of Yamato Kogyo, which produces steel through its local joint venture with North Carolina-based Nucor, has rallied 5 per cent this year as steel tariffs have given it a boost against Chinese competition.

“Imposing this 25 per cent tariff means competition in the local market with imported material will be eased,” president of Yamato Kogyo Mikio Kobayashi told the Financial Times.

Other European players with US operations such as Sweden’s SSAB and Spain’s Acerinox, which manufactures steel alloys and stainless steel products, would benefit, said Boris Bourdet, analyst at Kepler Cheuvreux in Paris. Germany-listed Kloeckner, a steel distributor with a majority of its operations located in the US, could also emerge as a winner.

Shares in US steel producers rose on Tuesday, even as Trump’s tariff war with Canada rattled equity markets.

The large US producers, notably Nucor and US Steel, have rallied more than 10 per cent this year — a sharp turnaround for an industry that has suffered its worst year since Trump’s first term as earnings suffered amid weak demand.

Philip Bell, president of US trade group the Steel Manufacturers Association, welcomed the tariffs, saying they would “correct the mistakes” of previous duties. During Trump’s first term and subsequently under then-president Joe Biden the US negotiated exemptions for important trading partners as well as individual companies.

The US steel industry had been “subject to a lot of unfairly traded steel” and the recent rise in prices should be seen more as a “normalisation”, Bell said.

The potential winners’ fortunes contrast with the expected negative impact on other steelmakers.

S&P Global Ratings said the tariffs will be “particularly painful” for Korean steelmakers, which had benefited from relatively generous tariff-free quotas, although rising US steel prices could soften the blow.

ArcelorMittal, the world’s second-biggest player, operates a joint venture in the US but has significant production in Mexico and Canada.

The group’s Canadian operation is a critical supplier to the US automotive sector, while its American facilities use semi-finished steel products from Mexico.

Genuino Christino, ArcelorMittal’s chief financial officer, last month played down the likely impact. The company, he said, took a hit of about $100mn a quarter in 2018. Those higher costs, however, were offset by higher prices.

Mills in Turkey also stand to gain, said Colin Richardson, head of steel at price reporting agency Argus Media.

With the US getting rid of all exemptions, imports from groups such as Çolakoğlu, Tosyali and Erdmir would now compete on a level playing field with European rivals that had benefited from carve-outs, he said, noting shipments from Turkey had started to rise in the past two weeks.

Despite the fair wind for parts of the steel industry, economists have warned higher metals prices will raise production costs for manufacturing industries such as automotive and could stoke inflation in the US.

The tariffs, Bourdet said, are “really intended for China” and could be a trigger to reduce the global oversupply from that country. “With tariffs all over the planet it will become less easy for China to export steel,” he said.

The iconic hatch may have found its saviour. Volkswagen confirmed that the fully electric Golf is already in the works and will be one of its first EVs to feature Rivian’s (RIVN) advanced software.

Rivian tech will power up the Volkswagen Golf EV

Can Rivian help the hatch find its place as an EV? That’s what Volkswagen is betting on. The next-generation hatch, set to arrive as the ID Golf, will feature an entirely new platform and software.

In November, Volkswagen and Rivian officially launched a new EV software alliance, “Rivian and VW Group Technology.” The German auto giant plans to invest up to $5.8 billion into Rivian and the new joint venture by 2027.

The partnership will build upon Rivian’s current electrical architecture and software stack, used in the R1S SUV and R1T pickup, for its next-gen “software-defined” EVs.

Rivian’s midsize R2 will be one of the first to feature the new platform, while Volkswagen plans to launch a series of next-gen “high volume models that are fully capable of advanced automated driving functions” built on the stack.

The first will be the production version of the ID.EVERY1, VW’s entry-level EV which will start at under $22,000 (20,00 euros) when it arrives in 2027.

After that, the Volkswagen will launch the electric Golf based on Rivian’s EV software stack. Volkswagen’s tech boss, Kai Grunitz, said “The ID 1 will be the very first vehicle with that architecture and will be the frontrunner on our side for the ID Golf.”

Grunitz added that starting with ID.1 “reduces the risk” because it requires less functionality than what the ID. Golf requires.

Since Rivian’s software system is much simpler with just a few ECUs compared to its current models (which run on way too many different units), VW can offer various levels of functionality.

“Vehicles in lower price segments will just need one zone, while a premium vehicle might need three or four, depending on functions,” Grunitz explained.

Rivian’s software and EV architecture are “highly flexible and highly updatable,” VW’s tech boss explained, adding, “We see it already on the road with Rivian today,” with regular OTA updates adding new capabilities.

This is “the next step” for Volkswagen so it can “offer new functions to customers even after they have bought their car” without even touching them.

According to Autocar, the electric Golf will also be one of the first vehicles built on its new SSP platform. With an 800V architecture, the next-gen platform will significantly improve charging times and efficiency.

Volkswagen’s head designer, Andreas Mindt, confirmed to Autocar that the team is officially working on the ID.Golf. “The Golf is a special thing within Volkswagen, and you have to stay true to the Golf,” he said, but he was tight-lipped about the design.

The upcoming electric Volkswagen Golf is expected to arrive around 2028 and be sold alongside the current gas-powered model.

Electrek’s Take

Although the Golf has historically been one of Volkswagen’s top-selling vehicles and is still popular, it’s starting to lose ground to new, more advanced electric models in the same segment.

Volkswagen already tried to revive the Golf as an EV. Remember the e-Golf? The electric car was retired to make way for the more advanced ID.3.

With Rivian’s help, the next-gen Volkswagen Golf EV promises to deliver much more with advanced tech and software.

Meanwhile, Rivian plans to launch an even smaller and more affordable R3 crossover and sporty R3X model. Will it compete with the electric Golf? We’ll find out more soon. Check back for the latest.

What do you think? Can Rivian preserve the Golf’s legacy as an EV? Let us know in the comments.

Optical interconnectivity startup Celestial AI raised a $250 million Series C1 round led by Fidelity Management & Research Co. at a reported $2.5 billion valuation.

The fresh cash comes almost exactly a year after the company locked up a $175 million Series C led by Thomas Tull’s US Innovative Technology Fund.

The Santa Clara, California-based startup’s photonic fabric platform helps separate compute and memory, making processing extensive AI faster and providing more energy-efficient computing.

The new round included participation from new investors including funds and accounts managed by BlackRock, Maverick Silicon, Tiger Global Management and Lip-Bu Tan, as well as participation from existing investors including AMD Ventures, Koch Disruptive Technologies, Temasek Holdings, Temasek’s Xora Innovation fund, Porsche Automobil Holding and Engine Ventures.

Founded in 2020, Celestial AI has now raised more than $515 million, per the company

The company’s photonic fabric helps solve one of generative AI’s biggest issues — untangling compute power and memory to make the technology more efficient.

“With the emergence of complex reasoning models and agentic AI, the requirements on AI infrastructure are compounding,” said CEO David Lazovsky in a statement. “Cluster sizes must scale from a few AI processors in a server to tens of processors in a single rack and thousands of processors across multiple racks, all while relying on high-bandwidth, low-latency network connectivity to handle massive data transfers between processors.”

Thanks to AI, chips seem to be the talk of tech right now. Just last month, EnCharge AI — a startup developing analog in-memory-computing AI chips — raised a Series B of more than $100 million led by Tiger Global.

On Tuesday, OpenAI released new tools designed to help developers and enterprises build AI agents — automated systems that can independently accomplish tasks — using the company’s own AI models and frameworks.

The tools are part of OpenAI’s new Responses API, which lets businesses develop custom AI agents that can perform web searches, scan through company files, and navigate websites, much like OpenAI’s Operator product. The Responses API effectively replaces OpenAI’s Assistants API, which the company plans to sunset in the first half of 2026.

The hype around AI agents has grown dramatically in recent years despite the fact that the tech industry has struggled to show people, or even define, what “AI agents” really are. In the most recent example of agent hype running ahead of utility, Chinese startup Butterfly Effect earlier this week went viral for a new AI agent platform called Manus that users quickly discovered didn’t deliver on many of the company’s promises.

In other words, the stakes are high for OpenAI to get agents right.

“It’s pretty easy to demo your agent,” Olivier Godement, OpenAI’s API product head, told TechCrunch in an interview. “To scale an agent is pretty hard, and to get people to use it often is very hard.”

Earlier this year, OpenAI introduced two AI agents in ChatGPT: Operator, which navigates websites on your behalf, and deep research, which compiles research reports for you. Both tools offered a glimpse at what agentic technology can achieve, but left quite a bit to be desired in the “autonomy” department.

Now with the Responses API, OpenAI wants to sell access to the components that power AI agents, allowing developers to build their own Operator- and deep research-style agentic applications. OpenAI hopes that developers can create some applications with its agent technology that feel more autonomous than what’s available today.

Using the Responses API, developers can tap the same AI models (in preview) under the hood of OpenAI’s ChatGPT Search web search tool: GPT-4o search and GPT-4o mini search. The models can browse the web for answers to questions, citing sources as they generate replies.

OpenAI claims that GPT-4o search and GPT-4o mini search are highly factually accurate. On the company’s SimpleQA benchmark, which measures the ability of models to answer short, fact-seeking questions, GPT-4o search scores 90% while GPT-4o mini search scores 88% (higher is better). For comparison, GPT-4.5 — OpenAI’s much larger, recently released model — scores just 63%.

The Responses API also includes a file search utility that can quickly scan across files in a company’s databases to retrieve information. (OpenAI claims that it won’t train models on these files.) In addition, developers using the Responses API can tap OpenAI’s Computer-Using Agent (CUA) model, which powers Operator. The model generates mouse and keyboard actions, allowing developers to automate computer use tasks like data entry and app workflows.

Enterprises can optionally run the CUA model, which is releasing in research preview, locally on their own systems, OpenAI said. The consumer version of the CUA available in Operator can only take actions on the web.

To be clear, the Responses API won’t solve all the technical problems plaguing AI agents today.

While AI-powered search tools are more accurate than traditional AI models — a fact that is unsurprising given they can just look up the right answer — web search does not render AI hallucinations a solved problem. GPT-4o search still gets 10% of factual questions wrong. Beyond their accuracy, AI search tools also tend to struggle with short, navigational queries (such as “Lakers score today”), and recent reports suggest that ChatGPT’s citations aren’t always reliable.

In a blog post provided to TechCrunch, OpenAI said that the CUA model is “not yet highly reliable for automating tasks on operating systems,” and that it’s susceptible to making “inadvertent” mistakes.

However, OpenAI said these are early iterations of their agent tools, and it’s constantly working to improve them.

Alongside the Responses API, OpenAI is releasing an open-source toolkit called the Agents SDK, which offers developers free tools to integrate models with their internal systems, put in place safeguards, and monitor AI agent activities for debugging and optimization purposes. The Agents SDK is a follow-up of sorts to OpenAI’s Swarm, a framework for multi-agent orchestration that the company released late last year.

Godement said he hopes OpenAI can bridge the gap between AI agent demos and products this year, and that, in his opinion, “agents are the most impactful application of AI that will happen.” That echoes a proclamation OpenAI CEO Sam Altman made in January: that 2025 is the year AI agents enter the workforce.

Whether or not 2025 truly becomes the “year of the AI agent,” OpenAI’s latest releases show the company wants to shift from flashy agent demos to impactful tools.